Yet another mis-selling scandal was on the cards today after the Government said it will probe recruitment agencies over policies sold wrongly to workers.

Six employment companies stand accused of misleading workers into buying personal accident cover they did not need, Vince Cable announced, although the investigation could mushroom into a wider enquiry.

He was responding to Shadow business secretary Chuka Umunna, who said he had evidence of mis-selling against Blue Arrow, Staffline, Acorn, Taskmaster, Randstad and Meridian, which together employ over 100,000 workers.

Accusation: Shadow business secretary Chuka Umunna said he had evidence against six recruitment agencies.

Response: Business Secretary Vince Cable agreed that an investigation was called for.

Mr Umunna said the firms sold the insurance at a profit even though workers did not need it as they were already covered by their employers.

Mr Cable described the practice as indefensible and possibly illegal. The Business Secretary told MPs the Department for Business, Innovation and Skills would investigate the companies and did not rule out a broader inquiry into the practice.

During BIS questions in the Commons, Mr Umunna said: 'I've been passed evidence which suggests Blue Arrow, Staffline, Acorn, Taskmaster, Randstad and Meridian - employment agencies employing over 100,000 workers - have been mis-selling personal accident insurance to workers which they arguably do not need and from which those agencies have been profiteering.

'There is even a company - G7 Group - which specialises in putting together these dubious arrangements for agencies. Further to my questions on this topic from October last year, will you now commit to holding a full inquiry into this shabby practice?'

Mr Cable replied: 'I will commit to ensuring that we have proper enforcement procedure. You have listed more companies today, we will investigate them and it may well merit a more broadly based inquiry.'

In an earlier exchange, Mr Umunna said: 'Do you agree with me that for an employer to mislead workers into purchasing personal accident insurance, the charges for which would take the workers pay under the minimum and the purchase of which is not necessary given the employers' own insurance cover, would be completely indefensible and possibly unlawful?'

Mr Cable replied: 'Yes I agree it would be indefensible and I think it is unlawful.

'I have been advised that this practice has happened, the relevant body which is the employment agency standards inspectorate is investigating the individual cases, we'll take enforcement action if it proves to be a widespread practice then clearly there is a case for a more broadly based inquiry.'